Date:         Fri, 11 Oct 1996 20:04:55 -0800
Sender:       Vanagon Mailing List <vanagon@vanagon.com>
From:         tbf@pacifier.com (Todd Francis)
Subject:      Envirotest and your money

>To: Multiple recipients of list <vanagon@lenti.med.umn.edu
>From: tbf@pacifier.com (Todd Francis)
>Subject: [Fwd: Envirotest [was: Re: New RFG causes more car fires?]] (fwd)
>
> Hi all:  If you have a little time you might want to read this and
understand a little more about the scum that make us give them money in the
name of "enviromentalism". The last I heard Envirotest holds contracts in
all 50 states. Two states are trying to get away without much success.
>
>
>>Jeff Jones wrote=20
>
>>> : Tim,
>>>=20
>>> : You have made several posts on this subject.  It's not entirely clear=
 to
>>>=20
>>> : your audience in this forum extends somewhat beyond the borders of
>>> : California, although I'm sure a considerable number of your readers=
 dwell
>>> : within.
>>>=20
>>>   Actually, the primary beneficiary of CARBs blunder (Smog Check II) is
>>>   a company called Envirotest.  They are a very well connected=
 (politically)
>>>   business that has promoted these types of auto emmisions regulations=
 in
>>>   a number of states.  On top of that, they have been accused of doing=
 many
>>>   unscrupulous things such as falsifying "scientific data", bribery=
 (hiring
>>>   politicians who help implement laws benefiting Envirotest into
"consulting"
>>>   positions), and filing, or threatwning to file, law suits to force
>>>   states to implement regulations that benefit Envirotest.  They have=
 been
>>>   kicked out of 1 state's smog program (New Jersey, I think) and are
currently
>>>   in litigation with at least one other over ET's lack of compliance to
their
>>>   contracts.
>>
>>	Car-test firm has big clout
>>      Envirotest founder uses government=20
>>
>>BY Thomas Frank Denver=20
>>Post Capitol Bureau
>>PD * 07/28/96=20
>>SN Denver Post=20
>>
>>Three years after he launched Envirotest Systems Corp. on a bet
>>that new environmental regulations would spell prosperity for an
>>automobile-emissions testing company, Chester C.=20
>>
>>Davenport demonstrated how he would use government to
>>guarantee success. Envirotest was in its brief, dizzying golden
>>age in the autumn of 1993, hitting the jackpot in Colorado, New
>>York and Pennsylvania with contracts worth more than $1 billion.
>>
>>
>>In just three months, its stock soared 50 percent.=20
>>
>>Suddenly, the company based in Sunnyvale, Calif., was about to
>>lose a $150 million contract with Connecticut, where an
>>evaluation committee had unanimously recommended hiring a
>>competitor. Davenport struck back.=20
>>
>>Within nine days, Connecticut Gov. Lowell Weicker heard from
>>his former chief of staff and campaign manager, who was
>>lobbying for Envirotest; another Envirotest lobbyist, whom
>>Weicker knew from the island of St. Croix, where both owned
>>vacation homes; the state treasurer; and the chairman of one of
>>the largest companies in Connecticut.=20
>>
>>Even the Rev. Jesse Jackson called to tout Envirotest as a
>>minority-owned firm. Davenport's team raised so many doubts
>>about the recommended firm - which state officials had rated as
>>substantially better than Envirotest - that Weicker ordered
>>entirely new evaluations. ..........The new look led him to choose
>>Envirotest.=20
>>
>>That contract and others have made Envirotest the largest
>>automobile-emissions testing company in the nation.=20
>>
>>But the federally mandated inspections Envirotest conducts in
>>pollution-riddled areas such as Denver have created a backlash
>>in states around the country.=20
>>
>>Inconvenienced motorists, out-of-work mechanics,
>>anti-regulatory politicians and dubious scientists have generated
>>a tidal wave of opposition to Envirotest's more sophisticated but
>>less convenient emission tests.=20
>>
>>As states resisted federal inspection mandates and Congress
>>abolished them, the company's early promise has faltered along
>>with its stock price, which dropped from $28.50 a share in March
>>1994 to $1.875 on Friday.=20
>>
>>Yet in that withering climate, Envirotest has managed to grow,
>>nearly doubling its revenues and employees from 1992 to 1995.=20
>>
>>It hired the best-connected lobbyists, built coalitions with
>>business and health organizations, took over competitors and
>>occasionally intimidated its opponents - as it did in Colorado
>>with a group of local service-station owners.=20
>>
>>Envirotest emerged from the storm "well-positioned ... as the
>>leader in the centralized emissions testing industry," according to
>>the most recent Wall Street analysis. But its zeal also has come
>>under attack.=20
>>
>>In Connecticut, an outcry over Envirotest's victory prompted the
>>attorney general and state auditor to investigate.=20
>>
>>The attorney general concluded that Envirotest's lobbying
>>"directly affected the decision-making process and presented
>>the appearance of partiality and unfairness to the public."=20
>>
>>"This office recommends that the governor reconsider his
>>selection of Envirotest," added the attorney general shortly after
>>the selection - to no avail.=20
>>
>>Envirotest has shown how it works a political system in
>>Colorado, where it has fought to win and keep a seven-year,
>>$140 million state contract to administer new, high-tech
>>emissions tests for all 1983 or newer automobiles in the
>>six-county metro area.=20
>>
>>The company's treadmill-style tests are aimed at identifying
>>polluting vehicles with more accuracy than previous tests, which
>>measured emissions while cars idled.=20
>>
>>The state's goal is to reduce smog and help Denver meet federal
>>clean-air standards. Envirotest actually began lobbying even
>>before it could do business in Colorado.=20
>>
>>In 1993, it hired the powerful Stealey & Associates, which
>>pushed the legislature to launch a new emissions-testing
>>program it could bid to run.=20
>>
>>When the state adopted the program and solicited bids,
>>Envirotest assembled a team featuring Steven W. Farber, the
>>chairman of Gov. Roy Romer's 1990 re-election campaign and a
>>major Romer fund-raiser, as its lawyer. Former Lt. Gov. Nancy
>>Dick was its real estate consultant, and former state Democratic
>>chairman Floyd Ciruli was its pollster.=20
>>
>>Envirotest, although it was the highest bidder, won the state
>>contract because state officials were impressed with its
>>experience and financial soundness and the technical superiority
>>of its proposed program.=20
>>
>>When one of the losing bidders complained, the state's health
>>director at the time, Dr. Patricia Nolan, told the disappointed
>>company president that Colorado was "oriented more toward the
>>quality of services provided."=20
>>
>>Yet that quality was so poor when the new emissions program
>>began in January 1995 that legislators immediately began
>>seeking ways to abolish it.=20
>>
>>Long lines at inspection stations produced a deafening motorist
>>outcry, which was fanned by service-station owners who had
>>lost business and a new crop of conservative legislators who
>>had been swept into office on the anti-government Republican
>>platform.=20
>>
>>The backlash was so costly that Envirotest President F. Robert
>>Miller said the company is losing money in Colorado, its
>>second-largest market after Ohio.=20
>>
>>Envirotest was hit with $436,200 in state fines in its first year for
>>898 violations of waiting-time limits and forced to hire new staff.=20
>>The company paid $142,602 in 1995 to seven lobbyists and
>>lobbying firms to beat back proposals that would have cost it
>>millions by limiting the program, and another $114,048 so far this
>>year. Its total lobbying bill since January 1993 is $331,550.=20
>>
>>"If this contractor didn't have the political clout that they have,
>>there is no way that they would be in place today," said Sen.
>>Mike Coffman, R-Aurora, an Envirotest opponent.=20
>>
>>Envirotest also has defeated foes outside the state House, with a
>>punch that has left them stinging. When a group of
>>service-station owners organized a ballot measure this spring to
>>let them inspect cars in competition with Envirotest, the
>>company shot back with its own ballot questions.=20
>>
>>One would have let anyone buying a car return it within three
>>days for a full refund - a prospect that so threatened the
>>Colorado Automobile Dealers Association that it dropped plans
>>to give garage owners $300,000 to help get their referendum on
>>the ballot.=20
>>
>>Envirotest ultimately won when it persuaded the state Supreme
>>Court to declare the service-station ballot question invalid. But
>>its tactics left some angry. "The kindest thing I could say about
>>that was it was a chess move," auto dealers President Bill Barrow
>>said of Envirotest's proposed ballot initiative. "A very good
>>chess move." Some legislators called it "blackmail."=20
>>
>>Envirotest's Miller said it was "just part of our approach to
>>protect our interests in Colorado." As much as Envirotest's
>>tactics have infuriated its opponents, they have pleased Wall
>>Street and impressed opponents.=20
>>
>>"They've had a great strategy," said Peter J. Thornton, an analyst
>>at Duff & Phelps Fixed Income who follows Envirotest. "They'd
>>meet with the right committees and politicians, be fully plugged
>>into state political process."=20
>>
>>Douglas Greenhaus, legal counsel for the National Automobile
>>Dealers Association, which opposed the new tests, called
>>Envirotest "a very well-organized, hard-charging, very
>>well-financed company." Envirotest often has hired
>>well-connected lobbyists, in addition to those in Colorado and
>>Connecticut.=20
>>
>>In New Jersey, it hired the governor's former campaign
>>co-chairwoman. In Minnesota, it hired the sister of the assistant
>>commissioner of the state agency that oversees automobile
>>emissions testing. In New Hampshire, it hired both the
>>governor's campaign chairman and a major campaign fund-raiser.
>>
>>
>>Envirotest's corporate counsel is Vernon Jordan, who was head
>>of President Clinton's transition team and is considered one of
>>the most influential figures in Washington. Jordan's law firm -
>>Akin, Gump, Strauss, Hauer and Feld - has given more money to
>>federal candidates through its political-action committee than
>>any other law firm, according to the Center for Responsive
>>Politics. Lobbying for stronger emissions testing is "an important
>>initial step in marketing its services,"=20
>>
>>Envirotest said in a prospectus for a 1993 public stock offering.
>>The company "attempts to build support for the adoption of such
>>a program among environmental and health organizations."=20
>>
>>One prominent supporter of Envirotest has been the American
>>Lung Association. It has lobbied various state legislatures,
>>including Colorado's in 1993, and the federal government for the
>>stringent emissions tests.=20
>>
>>The company has given the association $185,000 from 1992 to
>>1995, creating a relationship that has left some association
>>officials uneasy.=20
>>
>>When legislators in Pennsylvania were considering breaking a
>>$60 million-a-year contract with Envirotest in 1994, the lung
>>association paid for full-page newspaper ads across the state
>>touting Envirotest and urging readers to=20
>>tell lawmakers of their support. Some lung association chapters
>>in Pennsylvania immediately distanced themselves from the ads.=20
>>
>>"It's a relationship we tend to avoid," says Ginne Donahue,
>>promotion director for the American Lung Association of
>>Western Pennsylvania.=20
>>"It's very beneficial to a company to have a tie-in with a
>>reputable national health agency. ... But we're essentially
>>becoming advertisers for that product, and that's not what we're
>>intended to be."=20
>>
>>>From auto manufacturers to environmental groups, from the
>>Colorado Association of Commerce and Industry to the
>>Colorado Public Interest Research Group, Envirotest has had
>>many powerful allies in its quest for more stringent emissions
>>testing. None has been more influential than the federal
>>government.=20
>>
>>The company grew out of an investment fund Davenport set up
>>in 1988 to buy companies poised to grow as a result of pending
>>federal legislation. He formed Envirotest two years later to buy
>>Hamilton Test Systems Inc., a small emissions-testing firm
>>owned by United Technologies Corp. of Hartford, Conn.=20
>>
>>Borrowing from European banks, Envirotest paid $51 million for
>>Hamilton seven weeks after President Bush signed a massive
>>environmental law that, two years later, led the U.S.
>>Environmental Protection Agency to require 83 of the nation's
>>smoggiest areas - including Denver - to improve auto emissions
>>testing.=20
>>
>>Until they were weakened late last year, the regulations created
>>huge new markets for companies like Envirotest - and raised
>>questions about their influence in having the regulations
>>adopted.=20
>>
>>Some have suggested an "incestuous" relationship between the
>>government and Davenport, a former aide to the once-powerful
>>Democratic Sen. Alan Cranston of California and an assistant
>>transportation secretary in the Carter administration.=20
>>
>>Envirotest said in company documents that it "played a major role
>>in the development" of the new emissions tests through a
>>contract with the EPA to test the technology.=20
>>
>>Envirotest also joined the EPA in defending a lawsuit brought by
>>groups opposed to the new emissions regulations and seeking
>>to repeal them. "We always had a suspicion that there was some
>>closeness between EPA and Envirotest, but we never had
>>enough evidence to say there was anything improper," says
>>Stephen Sayle, general counsel of the House Subcommittee on
>>Oversight and Investigations, which held hearings last year that
>>led Congress to drop the EPA's emission requirements.=20
>>
>>Some cited an episode in Pennsylvania in 1994 when an
>>Envirotest lobbyist sent a copy of a legislator's proposal to scale
>>back the company's planned emissions program to a
>>Michigan-based EPA staffer who had helped develop the testing
>>technology. The staffer faxed the lobbyist back a memo - which
>>was circulated among legislators - stating that if the measure
>>became law, the EPA would impose sanctions "leading to the
>>lapse of transportation plans and the end of highway project
>>funding."=20
>>
>>Pennsylvania state Sen. Gerald LaValle, who sponsored the
>>measure, said it was "highly irregular" for an EPA staffer to
>>convey policy to a lobbyist instead of state officials. "It appears
>>to me that an extremely cozy relationship has been established
>>between your agency and Envirotest," he wrote in a letter to EPA
>>Administrator Carol Browner.=20
>>
>>Others see only shrewdness in Davenport, whose connections
>>to wealthy Washington developers have helped bring his net
>>worth to a reported $90 million and earn him the label of the
>>wealthiest black entrepreneur in American. Envirotest paid him a
>>salary of $834,376 in 1995.
>>
>>"Chester Davenport and a lot of smart, industrious people
>>understand that government is good for business," says Russell
>>Hinz, president of the Coalition for Safer, Cleaner Vehicles, a
>>pro-emissions-testing group of health organizations and
>>companies. "It's called using the system to your advantage and
>>being a winner." Envirotest has shown equal enterprise in using
>>the legal system to grow.=20
>>
>>In 1991, when negotiations broke down in Davenport's attempt
>>to buy a competitor, Systems Control Inc., Davenport filed two
>>lawsuits against the company's owner, Electronic Data Systems,
>>and suggested to reporters that he was the victim of racism.=20
>>
>>EDS officials responded that Davenport had hired a
>>public-relations firm and was trying to pressure them through
>>publicity over charges of racism.=20
>>
>>It was a lawsuit Envirotest filed in a Minnesota county court in
>>1991 with a conflict-of-interest allegation that forced EDS'
>>hand. Envirotest said Systems Control's contract for emissions
>>testing in Minnesota was illegal because, as company lawyers
>>pointed out to state officials for the first time, EDS recently had
>>been acquired by General Motors. State law said a company that
>>inspects cars cannot also sell them.=20
>>
>>Fearing that Systems Control no longer would be able to win
>>contracts, EDS quickly sold most of the company to Envirotest
>>for $83.5 million, making it the largest emissions-testing
>>company in the country.=20
>>
>>Envirotest ultimately acquired the rest of it after the company
>>lost contracts in Texas, Michigan and Maine. In 1993, after
>>Envirotest lost a contract in Maine, it sued the winning bidder on
>>charges of fraud and settled the case by acquiring that
>>company's rights to a remote-sensing device that checks
>>emissions with a roadside sensor.=20
>>
>>"It's a very wise thing for (Envirotest) to do," said University of
>>Denver scientist Donald Stedman, an inventor of the device,
>>noting that the EPA requires such testing in areas such as
>>Denver. "It has the potential to be very profitable, and it has the
>>potential to put the (current emissions tests) out of business."=20
>>
>>The company's most significant legal victory occurred earlier this
>>year in Pennsylvania, where Envirotest spent an estimated $200
>>million setting up testing stations only to have its program
>>canceled. The state paid the company $145 million. "They got a
>>very favorable settlement," Duff & Phelps analyst Thornton said.=20
>>
>>Most recently, Envirotest lost a $100 million emissions contract
>>in California despite a personal pitch from Davenport. The
>>company, which had fought so hard for its 65 percent of the
>>national emissions-testing market, is appealing the decision.=20
>>
> >>=A9 The Denver Post 1996=20
>>--=20
>=20
>
Todd Francis             tbf@pacifier.com
'86 Westy Syncro         Vancouver, Wa
'91 Tri Star Transporter